Prices Rise, Sales Fall After Philly Imposes Soda Tax

July 9, 20190

A YEAR AFTER Philadelphia imposed a tax on sugary and artificially sweetened beverages, sales of those items dropped by more than half in the city, according to a study published Tuesday that also found prices of the beverages increased significantly.

Researchers from the University of Pennsylvania Perelman School of Medicine analyzed data from January 2016, before the tax, to December 2017, after the tax, and included beverages sold at supermarkets, mass merchandisers and pharmacies. They discovered that the mean price per ounce of taxed beverages increased at all stores after the tax, and sales decreased at all the stores within the city.

The study, which appeared in the journal JAMA, said the decrease in sales after the “soda tax” in Philadelphia equates to about 1.2 billion fewer ounces of beverages sold, decreasing from 2.4 billion to 1.2 billion. However, sales in ZIP codes of Pennsylvania towns bordering Philadelphia increased by 308.2 million ounces.

Accounting for people who may have crossed city lines to purchase the products, the overall sales of taxed beverages decreased by about 38%.

Since 2016, the mean price in cents per ounce of sugary and artificially sweetened beverages sold in Philadelphia supermarkets rose from 5.43 to 6.24. In mass merchandise stores, prices rose from 5.28 to 6.24. In pharmacies, prices increased from 6.60 to 8.28.

Philadelphia became the second city in the U.S. to implement a tax on the beverages. Officials hoped the 1.5-cent per ounce tax would generate revenue to support universal pre-kindergarten, community schools and city improvements, as well as curb the consumption of unhealthy drinks.

Christina Roberto, lead researcher and assistant professor of medical ethics and health policy at the Perelman School of Medicine, said in a press release that taxing sugary beverages is “one of the most effective policy strategies to reduce the purchase of these unhealthy drinks.”

She added that the tax is a “policy win-win” that will improve people’s health. Additionally, Roberto said, it generated revenue for thousands of kids to attend pre-k.